AREQUIPA, Peru, Sept 23 (Reuters) - Mining companies in Peru are wringing bargains from contract and supply companies to weather slumping mineral prices, the head of the country’s main mining association said Wednesday.

But competitive operating costs still put mines in Peru at a safe distance from possible closures, said Carlos Galvez, president of the National Society of Mining, Petroleum and Energy.

The reliance of supply and service companies on miners gives them little room to resist demands for slashed fees, Galvez said.

“Do you want to earn very little or do you want to lose everything?” Galvez said, summarizing the ultimatum more miners are making as metal prices slide.

“Because if I fail you run out of work,” Galvez said on the sidelines of a mining conference.

Galvez, who is also vice president at Peruvian precious metals miner Buenaventura , said his company had recently cut spending on outsourced services and supplies.

“You tighten or die,” Galvez said, declining to specify how much Buenaventura had lowered costs.

Peruvian silver and zinc miner Volcan said earlier on Wednesday that it had reduced its contract personnel by 30 percent as part of “austere” measures needed to offset price slumps.

Peru, the world’s third-largest copper producer, is in a much better position than top producer Chile to withstand the price shock, Galvez said.